Pioneer plans infill drilling

Infill drilling at Manitoba’s Puffy Lake gold mine should be under way by January, reports Pioneer Metals (TSE).

The mine, northeast of Flin Flon, has been closed since 1989 and Pioneer hopes to return it to production.

If the drilling proves up the continuity of the ore zone, 7,000 tons from two stopes will be test-mined using longhole blasting.

One stope will be tested using a 10-metre spacing between sublevels, while testing of the other will entail a 20-metre spacing, explained President Stephen Sorenson.

He added that Tonto Mining, the company’s mining consultant, believes it can mine the shallowly dipping deposit to widths as low at 1.2 metres. Mining methods will be similar to those used by Tonto on the Goldstream copper-zinc deposit near Revelstoke, B.C.

Before test mining can begin, 250 metres of underground development are required. Also, a new decline will have to be collared. The initial phase of work, including test mining, will cost about $1.8 million.

Pioneer has enough money to cover the initial infill drilling, Sorenson said, but additional funds are required for the underground work.

If the expenditures qualify as Canadian Exploration Expenses (as per the Canadian Income Tax Act), it should be relatively easy to raise the money, Sorenson said. Based on Manitoba’s rules for flow-through share financing, an individual in the top tax bracket will have an average after-tax cost of $367.50 for each $1,000 invested.

Assuming Puffy Lake is re-started, the work will provide a second opening to the deposit, allowing Pioneer greater flexibility in mine planning. Recoverable proven and probable reserves are estimated at 855,000 tonnes grading 6.7 grams gold per tonne. A further resource in the possible category stands at 833,700 tonnes grading 7.15 grams gold.

A feasibility study, completed this summer, recommends the mine be returned to production at 750 tonnes per day. Based on an operating rate of 1,000 tons per day, 264 days a year, the mine would produce 1.6 million grams (51,200 oz.) gold annually. Estimated cash operating cost: $61.52 per tonne (US$250 per oz.).

The total cost to reactivate the mine and mill is estimated at $8.4 million, including underground development.

Sorenson said the “best-case scenario” is that the mine will be producing by the fall of 1994.

Meanwhile, Pioneer will continue exploring several grassroots exploration plays, with priority being given to the Task 9 and 10 claims, southwest of Williams Lake, B.C. The property has the same geophysical and geochemical signature as Taseko Mines’ adjacent Fish Lake copper-gold porphyry deposit. Pioneer plans to drill five or six holes there in early 1994.